Billionaire Mark Cuban has long kept his eye on Bitcoin. For a while now, the Dallas Mavericks owner has been discussing this market and getting involved, creating quite the buzz on Crypto Twitter at times.
So unsurprisingly, when it came time for him to field questions from Twitter through WIRED Magazine’s “Tech Support” Youtube segment, people asked him about his latest thoughts on cryptocurrency.
With No Use Case, Bitcoin is Inherently Worthless: Cuban
When asked about cryptocurrencies during the segment, Cuban responded critically. Boiling it down to a single statement, Cuban argued that cryptocurrencies, “particularly Bitcoin”, is only worth what someone else is willing to pay for it.
Then he elaborated, explaining how much like a baseball card or a piece of artwork, which are nice to look at and collect, Bitcoin does not have much of an underlying purpose.
Thus, its value is in the eye of the beholder. Thus, the business mogul equated Bitcoin to gold, explaining that they can both be defined as collectibles, are not alternative to fiat currencies, and are unlikely to succeed in a recession or if the traditional system crumbles.
Cuban went on to underline issues in the cryptocurrency space at large, touching on how for “99% of the population”, using this new asset class is too complicated. “Should I put crypto on my device? Should I print out the key? Should I let someone host the cryptocurrency for me?”, he questioned as he tried to convey the relative difficulty of using an asset like Bitcoin over, say, a dollar.
Cuban did, however, take some time to laud blockchain, arguing that there are many use cases for this technology class.
Is Cuban Right?
Cuban’s holistic stance on Bitcoin and cryptocurrency is similar to that taken by other leading economists and investors. Legendary value investor Warren Buffett, for instance, has claimed on multiple occasions that he sees not much more value in Bitcoin than he sees in a seashell or suit button.
The issue is, Bitcoin, unlike traditional assets, don’t generate cash flow, distribute a fixed yield to holders, create products, and so on and so forth.
Despite the status of the individuals backing this claim, some have argued that the assertion that Bitcoin has no value is false.
Parker Lewis, a team member at blockchain financial services company Unchained Capital, recently released an extensive blog post outlining how Bitcoin actually isn’t backed by nothing. Instead, Lewis argues, Bitcoin is backed by “the only thing that backs any form of money: the credibility of its monetary properties.”
Gradually, Then Suddenly (#8): Bitcoin is Not Backed by Nothing.
Back after missing a few weeks. Weekend reading for all your friends that think bitcoin is merely a collective hallucination. https://t.co/khJ4KSYieq
— Parker Lewis (@parkeralewis) September 27, 2019
Honestly, the post is quite elaborate and can get complicated at times. But the bottom line that Lewis argues is this: Bitcoin, through its decentralized protocol and distributed network of nodes and miners, offers society an arguably better alternative to the traditional fiat, which is rapidly being inflated away as “central banks [realize they need] to expand the monetary base in order to sustain the legacy system.”
Indeed. As outlined in a previous Blockonomi post, Bitcoin is unconfiscatable, decentralized, non-sovereign, immutable, censorship-resistant, global, public, and even more scarce than gold.
This, analysts have argued, makes it a prime candidate to succeed in a world where governments and central banks begin to impose unorthodox policies, like negative interest rates and Modern Monetary Theory, to help stave a recession or depression in the fiat system.
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